The Exchange with Gervais Williams of Premier Miton
Why It Matters
Shifting capital to undervalued UK small‑caps can generate outsized, low‑beta returns, providing a hedge against mega‑cap volatility and delivering fresh sources of alpha for global investors.
Key Takeaways
- •UK small‑cap stocks are undervalued and poised for outsized returns
- •Diversification away from mega‑cap tech will drive future equity income
- •UG Group’s organic growth targets 7‑9% market share, cash‑rich
- •Europa Oil’s Equatorial Guinea well offers high‑probability upside at low cap
- •Tungsten West’s Devon mine could become world‑leading low‑cost producer
Summary
In this Fox Markets Live interview, fund manager Gervais Williams (Jaice Williams) argues that the UK’s small‑ and mid‑cap universe is dramatically under‑priced and ready to outshine the mega‑cap‑heavy global indices. He stresses that investors have been over‑exposed to the “Magnificent Seven” tech giants and that a shift toward diversification and equity‑income strategies will unlock superior returns. Williams highlights several high‑conviction ideas. UG Group, a digital‑by‑default B2B energy supplier, is scaling organically from £100 m to £1.5 bn sales, targeting 7‑9% market share while sitting on net cash. Europa Oil’s Equatorial Guinea Barracuda well, backed by Chinese processor Fuhai Energy, carries an 80% success probability and could multiply the £19 m market‑cap. Tungsten West’s revived Devon tungsten mine, once a £20 m company, now commands a £400 m valuation and promises low‑cost, long‑life production as tungsten prices surge. Notable data points reinforce his thesis: UG Group’s share price has lagged despite eight‑fold revenue growth, outpacing Nvidia’s six‑year trajectory; Tungsten West’s NPV of $1.7 bn reflects a 40‑year mine life; and the UK FTSE 100 has recently outperformed the S&P 500, underscoring the upside in domestic equities. Williams also praised NYOX’s diagnostic platform for asthma, rejecting a takeover bid to preserve upside potential. The broader implication is clear: capital allocated to UK small‑caps—particularly cash‑rich energy players, high‑probability resource projects, and critical‑metal miners—offers a compelling risk‑adjusted return profile in a market still dominated by over‑valued mega‑caps. Investors seeking alpha should re‑balance toward these agile, locally‑focused firms before broader market recognition drives valuations higher.
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